UC President Janet Napolitano answers questions about the tuition freeze that she announced during the UC Regents meeting at a press conference during a break at the Mission Bay Conference Center in San Francisco, Calif., on Wednesday, Nov. 13, 2013. Napolitano shares some of her plans as UC President on the second day of a three day gathering of the UC Regents. (Laura A. Oda/Bay Area News Group)

The University of California on Monday announced plans for a $250 million venture capital fund to finance startups created by students and faculty, signaling a growing interest from the state’s revenue-strapped university system to cash in on companies created in dorm rooms and classrooms.

UC Ventures would be seeded with money from the university system’s $9 billion endowment and target work done at the university’s 10 campuses, five medical centers, three national laboratories and 30 incubators and accelerators, and signals the rise in student- and faculty-led startups not only at prestigious private institutions such as Stanford, but at public universities. One of the largest of its kind, the fund offers financial resources to the kinds of companies that VC firms often steer clear of, concerned that they would require too much hand-holding and may fail outside the safety of a college campus.

“Normally things that are still at work on campus aren’t yet formed as a company idea. It’s still a science project,” aid Randy Hawks, managing director of Oakland-based VC firm Claremont Creek Ventures. “They haven’t hired the business development guy or the sales guy. And at the end of the day we invest in companies.”

With its new fund, UC hopes to funnel money early into startups to foster their growth — and return some of the profits back to the UC, rather than to traditional VC firms. The independent fund would not use any tuition or public money and would be managed by an advisory board that includes Silicon Valley leaders.

More than 700 startups have formed at UC, from companies that have created everything from new vaccines for hepatitis B to a new way to grow strawberries.

“This is an extremely rich environments for innovation,” said Dianne Klein, a spokeswoman for UC. “It just makes perfect sense.”

The UC fund would be a long-term commitment, Klein said, so students and faculty wouldn’t have to worry about pausing their research and development every few years to go out and raise funds. And having the backing of the university system, she said, removes much of the pressure startup founders feel from VCs who want some control over the company’s growth.

“Traditionally, in VC funds, it’s 10 years out, and they say: ‘What do you have for me?’ That’s not the intention” of UC Ventures, she said.

But, Klein said, the fund isn’t the same as an academic scholarship — ultimately, it is about making money at a time when educations budgets are being slashed. “This fund first and foremost aims to attract a return of investments,” she said. “This is about making money for the university.”

The UC Board of Regents will vote on the proposal Sept. 18 during the board’s regular bimonthly meeting at UC San Francisco’s Mission Bay campus, according to a statement by UC President Janet Napolitano. If approved, UC Ventures would launch by the end of 2015.

Private universities such as Stanford have traditionally been involved in funding student companies, but public universities –whose charge is to research and educate for the public benefit — have only recently become more inclined to prop up in students’ entrepreneurial endeavors.

“There have always been entrepreneurial students trying to start things, but what has been a refined focus is the UC governance trying to figure out how to be a bigger participant in these things,” Hawks said. “Public universities have been a little bit slower to adopt the mind-set of ‘Lets get in on the upside.”’

Startups formed at universities have traditionally looked to VC firms such as Claremont Creek Ventures, which has invested in eight companies with roots in the UC system, or about 20 percent of its portfolio. Since 2005, startups formed out of UC have raised $5 billion in venture capital. But many VCs generally wait to invest until the founders finish their degree, and often steer clear of research-intensive companies — such as biotech and health startups which often begin at universities — that will require a lot of money and may not offer a return for decades.

“We’ve had to come in and work elbow-to-elbow with the founders,” said Shomit Ghose , a partner at Onset Ventures, an early-stage firm in Menlo Park that invests heavily in software-focused university startups. “Others may think its too difficult. This not just add water and away we go.”

But that mentality, Ghose said, is changing, as more companies from universities rocket to quick success — recent UC biotech startup Aragon was acquired by Johnson & Johnson in August 2013, and Kite Pharma raised about $106 million in its June IPO. “I think it’s occurring to a lot of people that there is lot of innovation at universities and it needs to be captured,” he said.

LH Shoreline, an affiliate of Stockbridge Capital Group, has bought the Google-rented building at 1001 N. Shoreline Blvd. in Mountain View for $169.9 million, according to Santa Clara County property records.